Aurel Arion
CEO
Renovatio Trading

12 August 2019

Renovatio Trading is an active supplier of electricity and natural gas, present on the Romanian market since 2005. It is part of the larger entity Renovatio Group, which develops projects in the energy sector, particularly in renewable energy. In Romania they have developed 571 MW wind power and 92MW solar power, part of them with EDP Renewables.

 

Can you introduce our readers to Renovatio Trading and the larger Renovatio Group?

We started our activities in renewable energy back in 2003, when our team was involved in installing the first wind turbine in Romania. Around the same time, we initiated a major wind measurements campaign in Dobrogea and other regions of the country and began to develop renewable energy projects. By 2008 we had a significand wind energy projects portfolio and we partnered up for the Romanian market with EDP Renewables, the largest wind energy producer in Europe and started expanding at European level. We implemented projects in Bulgaria, Greece, Italy, Poland, Portugal, and Republic of Moldova and since 2009 we have a branch in Columbia, where we managed to close two transactions of 500 MW each. 

In parallel, we have developed a gas (CCGT) project in Satu Mare, now ready-to-build, that amounts to 470 MW and created Renovatio Solar, a company that delivers small/medium size commercial and residential PV projects. In 2013 we started looking more closely at electric mobility, a concept in its infancy really at that time in Europe and Romania, and in 2016 we installed our first public fast charging station for electric cars. Renovatio e-charge became the first and largest network of electric charging stations in Romania, totaling more than 120 charging points at present.

 

Renovatio Trading was created right as the market liberalization process started. How did you experience this transition?

The challenges were plenty in the beginning. On the one side we needed to attract customers into the free market, and at the same time we needed to ensure that we could source the entire amount of energy we needed. There were very few sources available at the time, we were mainly relying on state owned companies, but things slowly changed as renewable energy producers started to appear. They created a truly competitive environment. Another shift that took place along with market liberalization was that end customers became much better informed, because they were and still are constantly targeted by other suppliers.

We try as much as possible to supply green energy (now it accounts for about 65% of our volumes) but it is difficult given its variable character. To address this issue, we have created a setup where we overlap certain productions, and alternate between hydro, wind and solar power. By having several energy sources, we ensure that we always have a minimum production of renewable energy.

 

What is your outlook on the investment landscape in the renewables sector at the moment?

In Romania we developed projects up till 2013, when we put a stop to investments because of the legislative changes that were instituted. Out of the 40,000 MW developed in Romania, only about 4,000 MW have actually come to fruition. The projects were spread out a lot and left behind mountains of problems; if you want to start a new project today you will inevitably be stepping on an area that was previously affected by someone else.

As long as Romania does not join the new EU plan for subsidizing renewable energy, it will be difficult to develop new projects until we achieve grid parity. On the other hand, the cost for 1 MW of wind power has become as low as EUR 800,000 - 900,000, compared to ten years ago when we paid approximately EUR 2 Mil. On the photovoltaic side, the price of a MW is now around EUR 600,000 whereas the first one we installed cost us EUR 3.2 Mil. The price of energy has also gone up somewhat, so it is becoming increasingly feasible to develop a profitable project without the need of a support scheme, but in my opinion that time has not yet come. We are considering building some new wind power capacities, in locations that have not been developed previously, but it is not something that we want to move ahead with just yet. Our focus right now is to develop a gas project in Satu Mare (Combine Cycle Gas Turbine) that can help on the market balancing side. 

 

You were the first company to build a public electric vehicle charging station in Romania. How is the electric mobility sector evolving?

We decided to build the infrastructure well aware that it would take a long time to recover our investment (a fast charge station can cost up to EUR 35,000). Things are moving slowly but surely, we are starting to see more competition in the market, which is a very good thing. Since last year we are the beneficiaries of an EU co-funded project (CEF Transport Program) that will ensure a better development of the charging infrastructure along core transport corridors of the TEN-T network that cross our country.

One challenge we are noticing is people’s perception that their cars will run out of electricity, but in reality, the network of stations is already developed enough that it allows for travel pretty much anywhere in the country and overcome the feeling of range anxiety. In terms of costs, electric cars tend to be more expensive but on the other hand the TCO (Total Cost of Ownership) is significantly reduced, and the experience of driving itself is much better. Like many other countries, Romania decided to implement a support scheme to encourage the shift to a sustainable transport. The Rabla Plus program, initiated by the Environmental Fund Administration (AFM), offers one of the highest subsidies in Europe towards the purchase of a new Electric Vehicle.

 

What would you like Renovatio Trading to achieve within the next two to three years?

We have been growing year-on-year by roughly 10% in number of clients, and by about 20% in terms of MWh supplied. In fact, this year we are marking 1 Mil MWh of energy supplied yearly. We plan to maintain this growth rate and we keep an interest in international markets, with our sights potentially set on Asia in the short to medium run.

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